Business

May 16, 2017 | 01:42

French cars drive into Iran election

French carmakers PSA and Renault are turning their U.S. absence into an Iranian advantage by piling into a resurgent market still off-limits to foreign rivals fearful of sanctions under Donald Trump's administration. Rosanna Philpott reports

TRANSCRIPT +

When Iran struck the nuclear deal in exchange for more global trade, French car makers rushed to turn a weakness into an advantage.
Unpopular in US - Peugeot and Citroen maker PSA and Renault were free to enter Iran's relatively untapped market.
Unrestricted by sanctions that remained on the books - keeping their US and German competitors out.
Reuters senior correspondent Edward Taylor says - two years in - French companies are expanding their foothold.
SOUNDBITE (English) EDWARD TAYLOR, REUTERS SENIOR CORRESPONDENT, SAYING:
"French carmaker Peugeot has agreed to make the Peugeot 2008 locally - this could be quite a boon for them because there's a 40 percent import tariff at the moment. Most of the cars in Iran are quite old and too expensive and out of reach for the normal population. So early movers may have a lucrative deal"
With just days until the Iran's Presidential election
President Hassan Rouhani - who's seeking re-election - is pushing the French investment to the forefront of his campaign.
Keen to validate his pursuit of attracting foreign money in exchange for shelving his nuclear ambitions.
SOUNDBITE (English) EDWARD TAYLOR, REUTERS SENIOR CORRESPONDENT, SAYING:
"Rouhani has used the idea of the expanding and opening up of the Iranian economy as a platform for re-election. He agreed to abandon nuclear ambitions in exchange for allowing imports and exports."
But affordability may prove to be a bump in that road
The Peugeot 2008 is expected to cost the equivalent of 24,000 dollars when it arrives in showrooms.
More than 3 times the average household income in Iran.

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